2011 Scams and Scamsters: What to Look Out for in the New Year

Most of us have heard about these. They are usually either “you just won the Australian lottery,” “somebody you don’t know just left you a large inheritance,” or “help me transfer millions of dollars of excess government money from the Bank of the Congo to the U.S.” These are notorious scams. Do NOT respond to them; the scamsters can sell your email address to other scamsters or use your personal information to steal your identity.

Over the past several months, we have seen an increase in the rise of false email solicitations, including scams directed at real estate agents from purported offshore real estate buyers.

Typically this scam starts off with the receipt of an unsolicited email from someone overseas who purports to want to purchase real estate. What they are really after is enough personal information to either perpetuate identity theft or empty out your bank account. Be careful about these scams, because the “senders” of these emails typically use real names of real people, sometimes doctors. Just because you can verify that someone with the same name exists, that does not mean you are not being scammed!

We have seen this start off with an unsolicited email asking to do business. After the initial business connection, the overseas scamster sends what looks to be a legitimate check or even a bank or cashier’s check to the party in the U.S., with a request that the U.S. person cash the check, keep most of the money and return the “change.” The purpose of the scam is to get the U.S. person to send a valid check for the “change” before they discover that the bank will not honor the scamster’s check.

These are the same types of computer scams that have been going on for decades, but the frequency has increased. There are literally multiple versions of spyware and viruses that are created every single day. Be sure that your antivirus software (Norton, MacAfee, etc.) is properly to set to protect you from these threats.

The essence of this scam is to turn unwitting victims into money launderers. More specifically, there is much more identity theft than there are people available to obtain money using the identity theft. For that reason, the scamsters offer to “employ” people who work at home to “process payments” through their U.S. bank accounts. What they are actually doing is processing money that is illegally obtained from various other scams.

Here is a summary of some of the other schemes scams and rip-offs we have noticed lately:

Just because someone appears to have a legitimate business does not mean they are legitimate. We have noticed an increase in people having fake businesses (including many nonexistent website businesses), some even claiming to have prestigious New York City addresses.

This is a version of the fake business with a twist. Specifically, we have noticed that there are scamsters reporting to be businessmen working for legitimate businesses. They place orders for goods and services that are never paid for. After the theft of the goods (which are normally delivered to a separate address or trans-shipped to a third destination), the seller learns that they have been victimized only when they call the legitimate address and are informed that the “representative” does not work for the company.

This is not normally classified as a scam, but you will certainly feel as though you’ve been scammed if the federal ICE police raid your business, fine you and/or threaten you with prosecution because you, as an employer, did not obtain, verify and keep legitimate I-9 documents. Every employer now has a duty to verify every employee’s right to employment, and ICE has stepped up its efforts to audit and fine employers for paperwork discrepancies.

This scam has been around for a long time and will probably continue indefinitely. Someone purchases a business, with little or no down payment. Then, they make no further payments, strip the business of its assets and cash, and leave the former owner holding the bag.

Everyone knows about the real estate recession, and a few scamsters are taking advantage of it by renting luxury property, submitting false rental applications, and then failing to pay rent. Evictions can be stalled by falsified complaints about the failure of the landlord to maintain heating, air conditioning, delivery of utilities, etc.

In any important transaction, it can be as important to know who you’re dealing with as it is to document the transaction. If you can’t trust the person, how can you trust their signature on a contract? There are many new and inexpensive ways to check people’s backgrounds, and you should use them.

Always use antivirus software and antispyware software and keep it up to date. From time to time, check your internet security levels on your computer. Further, if you’re not using your computer for extended lengths of time, turn the computer off and/or disconnect it from the internet.

Emails are a favorite form of scamster communication for three reasons: they are inexpensive, the identity of the sender can easily be faked, and email messages are easy to electronically duplicate in large numbers.

Always use your common sense in any major transaction. Are you being asked to do something that is abnormal or strange in any way? Does a transaction smell like it may be illegal, or that somebody may be hiding something? Is the other party asking you to do something complicated, sophisticated and/or financial, using unsophisticated or grammatically incorrect language? Many times scamsters don’t want to take even the time or expense to spell-check the language they use in their scams. If it looks too good or too simple to be true, it’s probably a scam.

If you’re doing anything critically important or potentially risky, involves a large commitment on your part, or seems strange, get expert advice. Many times scams can be avoided simply by talking to your professional advisors, whether they are your lawyer, accountant, banker or insurance agent, and asking, “Does this sound right to you?”

Do you have questions about employee loans or compensation issues? Schedule a planning meeting with Phil Glasscock by calling 480-941-4359, or email jpg@jpglaw.com.